Sport sponsorship spending is up and projected to grow even faster over the next five years, according to new analysis by Two Circles, WPP’s data-driven sports agency.
Spend has increased by an average 4% a year since 2014 – a figure expected to rise to 6% between 2020 and 2024.
But unsold inventory, unreported engagement and outdated asset-packaging mean rightsholders are currently missing out on £14bn a year.
Using its new Sponsorship Engine product, Two Circles estimates that the combined global value of sports sponsorship assets stands at £49bn, while brand spend will reach only £35bn in 2019.
Gareth Balch, Two Circles CEO, explained: “Most rightsholders continue to package and sell sponsorship just as they did 20 years ago – offering brand exposure through linear broadcast coverage as the main benefit for brands.
“Globally we’re spending more time consuming entertainment on digital platforms; we consistently see a disparity between what brands need to reach an audience effectively and quantifiably, and what digital assets rights-holders are able to offer in their sponsorship packages.”
Two Circles predicts spend on sponsorship to hit £48bn by 2024 as more rightsholders package digital assets into sponsorship propositions and brands feel the benefits through real-time data-based tracking and evaluation tools.
The prediction comes in spite of concerns in Europe that marketing restrictions on gambling firms, which currently account for 12% of sports sponsorship spend in the UK alone, will have a considerable negative impact on the sports sponsorship market.
Balch added: “Rightsholders are adapting to this new world and we predict a sports sponsorship correction: by embracing the power of data and digital to create sponsorship assets that better satisfy the objectives of brands, rights-holders will realise the true value of their sponsorship businesses. This will drive greater spend from brands in all sectors, not just the ‘traditional’ sectors for sport such as financial services, automotive, airlines and gambling.”
In the UK, six sectors – financial services, automotive, airline, gambling, alcohol and soft drinks – currently account for almost three-quarters of sponsorship spending.